Want to buy a home but still have a home to sell? How do you protect yourself?
Continuing with my series on contingencies, this particular contingency is called the sale of a buyers property contingency. Or you can also say I’m purchasing your home contingent upon my home selling. You need to protect yourself when purchasing a home by using the specific form outlining this particular contingency. If you don’t you will be legally bound to the purchase and could end up owning two homes in making to mortgage payments. Most people want to avoid this so it’s very important when you’re drafting a purchase agreement to include this contingency.
- Essentially what the contingency says is that you are going to or have listed your home located at x with a real estate agent or you will be listing it within x number of days.
- The seller may remove the contingency at any time and for any reason. This is the one contingency that the seller has control of. They can just wake up one day and decide that the contingency on their house is hurting their ability to sell their home. So your kind of at the mercy of the seller when you present this form.
- The one way you can remove the contingency so no other party can purchase the home is to give the seller within x number of business days proof of it valid purchase agreement for your home.
- If the seller requests removal of the contingency in the buyer does not remove the contingency in a timely manner, the purchase agreement will be considered canceled.
So the long and short of all those highlights are you are at the mercy of the seller until you get your property sold. Typically you have a certain amount of time once the contingency is been called to get that home sold. If you’re unable to get your home sold within that timeframe the seller has a right to cancel that purchase agreement and work with another buyer. Biggest downside for a buyer in this is that you have no control over the situation and you typically will get one of two things. You’ll either get a better price or longer term to get your home sold. In most cases you don’t get both.
The upside for the seller is they do have a signed offer on their home and they have the benefit of continuing to try to sell their home to somebody else in the event that you can perform and get your home sold. You gonna want to take a long hard look at this before you decide to move forward with it. Discuss it with your real estate professional so they can give you all of your choices to pick the best option for you.
Tom Sommers Edina Realty 952-994-7204